Minor International

SCB Securities February 24, 2014 12:14 pm

4Q13: Beat estimates on higher revenue, margin

Minor International Plc (MINT)

4Q13 net profit of Bt1.6bn (40% YoY, 120% QoQ) beats on better food sales, margin, other income. Excluding extra items, MINT's core earnings increased 43% YoY and 120% QoQ. This beat the market by 12% and SCBS by 8% on a higher gross margin, revenues (largely from its food arm) and higher other income. MINT announced a Bt0.35 DPS on 2013, implying 1.5% dividend yield, with XD on April 16 and payment on April 30.

Overseas diversification a plus in this environment, but for now we put MINT's earnings forecast and TP under review until the analyst meeting on February 26.

Food (41% of total revenues): Strong 20% YoY increase in 4Q13 (6% QoQ) came from store expansion (+12% YoY and 6% QoQ) and consolidation of Riverside in China, combating the low 0.9% growth in same-store sales (SSS). 2013 revenue growth was 17%, brought by SSS of 1.5% and 12% more outlets.

Residential (10% of total revenues): 4Q13 revenue grew 36% YoY and 4% QoQ off strong sales of its time-share project and transfer of 5% of total sellable units at St. Regis Residence and 1 villa at Samui. 2013 revenue growth was 15%.

Gross margin grew to 59.2% in 4Q13 from 56.2% in 4Q12 and 56.6% in 3Q13 largely thanks to a high gross margin for the hotel, food and residential businesses. 2013 gross margin was 58%, growing from 56% in 2012.

EBITDA margin 26.6%, up from 22.9% in 4Q12 and 18.4% in 3Q13 due to the strong revenue growth. For 2013, EBITDA margin was at 22% up from 21% in 2012.

Other income at Bt526mn in 4Q13, up 9% YoY and 52% QoQ. For 2013, other income was Bt1.4bn, up 39% YoY.

4Q13 net profit of Bt1.6bn (40% YoY, 120% QoQ) beats on better food sales, margin, other income. Excluding extra items, MINT's core earnings increased 43% YoY and 120% QoQ. This beat the market by 12% and SCBS by 8% on a higher gross margin, revenues (largely from its food arm) and higher other income. MINT announced a Bt0.35 DPS on 2013, implying 1.5% dividend yield, with XD on April 16 and payment on April 30.

Overseas diversification a plus in this environment, but for now we put MINT's earnings forecast and TP under review until the analyst meeting on February 26.

Food (41% of total revenues): Strong 20% YoY increase in 4Q13 (6% QoQ) came from store expansion (+12% YoY and 6% QoQ) and consolidation of Riverside in China, combating the low 0.9% growth in same-store sales (SSS). 2013 revenue growth was 17%, brought by SSS of 1.5% and 12% more outlets.

Residential (10% of total revenues): 4Q13 revenue grew 36% YoY and 4% QoQ off strong sales of its time-share project and transfer of 5% of total sellable units at St. Regis Residence and 1 villa at Samui. 2013 revenue growth was 15%.

Gross margin grew to 59.2% in 4Q13 from 56.2% in 4Q12 and 56.6% in 3Q13 largely thanks to a high gross margin for the hotel, food and residential businesses. 2013 gross margin was 58%, growing from 56% in 2012.

EBITDA margin 26.6%, up from 22.9% in 4Q12 and 18.4% in 3Q13 due to the strong revenue growth. For 2013, EBITDA margin was at 22% up from 21% in 2012.

Other income at Bt526mn in 4Q13, up 9% YoY and 52% QoQ. For 2013, other income was Bt1.4bn, up 39% YoY.